On July 11, 2016, the National Labor Relations Board issued its most recent decision further continuing its expansion of joint employer liability. In Miller & Anderson, Inc., the NLRB addressed the issue of employer consent in relation to union formation when the union would involve both sole employees and joint employees. The Board found that where an appropriate community of interest exists between the sole and joint employees, the potential union does not need employer consent.
This case involved a mechanical contractor that employed its own employees as well as contracting some staffing through another company. The Sheet Metal Worker’s International Association filed a petition for union representation to represent both sets of employees. The regional director for the NLRB originally rejected the petition because the Sheet Metal Worker’s International Association did not obtain the consent of either Miller and Anderson or the staffing agency, Tradesmen International, despite both consents being required.
As part of the review of that decision, the NLRB had to review two separate cases that had previously addressed this issue: M.B Sturgis, decided in 2000, and Oakwood Care Center, decided in 2004. The dueling cases, decided so close to each other, took different approaches to this issue, with Oakwood overruling and overturning Sturgis. Under Sturgis, these bargaining units involving both sole and joint employees must only meet a community of interest test to satisfy the NLRB. However, under Oakwood, bargaining units had to obtain the consent of both employers - an often insurmountable obstacle. Complicating matters further, the decision in Oakwood represented a return to a standard which had existed prior to Sturgis under a case called Lee Hospital, which had itself represented a departure from a previous standard similar to Sturgis.
The key distinction in these cases involves whether to treat this situation as a sole employer or multiemployer bargaining. Sturgis and its companion case look at the case from the perspective of the user employer, as opposed to supplier employer, and treat the supplier employer as compromising a single employer unit. This would be distinct from situations with multiple user employers, which are treated differently under the law. Oakwood and Lee Hospital on the other hand, view all multiple employer situations equally, regardless of the distinction between user employer and supplier employer. Under the law, multiple employer bargaining requires the consent of all employers.
The NLRB ultimately decided in a return to the Sturgis standard, continuing 26 years of ping pong between the competing standards. Now, companies and unions must look to the community of interest standard when faced with the possibility of a joint bargaining unit combining sole and joint employees. This decision only furthers the NLRB’s recent trend of increasing the power of employees under contracting or staffing contracts, following on the heels of the Board’s Browning Ferris decision, so employers must now expect more cases along these lines.
Interestingly enough, the proposed bargaining unit at issue in Miller & Anderson ceased to exist about one year ago. Normally, this would have rendered the case moot from a legal perspective and caused the case’s dismissal. The NLRB proceeded anyway, remanding the case for a hearing on whether the case is now moot.